UEA e-commerce liable to 5% VAT

The United Arab Emirates tax office, the Federal Tax Authority, has confirmed that e-commerce sales to consumers by foreign vendors are liable to the new 5% VAT regime.

Supplies include both physical goods and digital services (i.e. income from: streaming media; apps; software; e-books; journals; and membership sites). There is an annual selling threshold of AED 375,000.

VAT was introduced by the UAE on 1 January 2018. The state is one of the six Gulf Cooperation Council countries which is bringing in the harmonised consumption tax. However, only Saudi Arabia has also launched its VAT. Bahrain is expected to follow at the end of this year.

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